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Monday, January 14, 2008

We got another bounce today, nominally because of IBM's good earnings, but the volume just wasn't there. Technically we are in day 4 of the rally attempt (i should wait for tomorrow's IBD to confirm that, they hve been a little cobfusing of late). We are looking for an up day on higher volume than the previous day, and today's volume should be easy to beat. 1406 fell pretty handily, but we really need to break through 1435 before I am convinced.

The NDX really doesn't look any better. The best positive I can see is we closed on the high of the day. Getting back above the 200dma will make me feel more bullish.

The Dow transports are also trying to rally. Oil has backed off a bit, but I don't expect it to drop much further, if at all.

E-trade has a free service called Clearstation. IIf you are not familiar with it, it is a free service which does not require an E-trade account. It has been a little spotty lately (I imagine E-trade's recent difficulties might have something to do wit it), but it is really good for managing a watchlist. It is also good for finding the strongest sectors and industries. One of the strongest sectors of late is Basic Materials, and the strongest industries in that sector are specialty chemicals *primarily agricultural) and gold. GDX is an index of gold mining stocks which does well when the price of gold rises and is a good way to play the gold market. GDX broke out to a new high today, but may be due for a pullback here.

GLD is another way to play gold. It is an ETF which tracks the price of gold. This looks like it is poised for a pullback, too, giving a lower risk entry.

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About Me

I am not a financial professional, just a guy that trades my own account.
I am also not a musical professional, just a guy that makes music on the computer. Thus, two blogs, one trading and on musical.
And, no, the picture is not me, it is the late, great John Belushi, one of the inspirations for these blogs.

About ThIs Blog

This blog is focused on technical analysis of stocks and markets, putting heavy emphasis on chart analysis. My trading style is derived primarily from my mentor, William "Yoda" O'Neil, and the focus here is on leading and breakout stocks, but all forms of trading are covered to some extent. Economic and political news that effects the market are also topics here, and the blog may occasionally become a platform for my political and philosophical ranting. I keep several spreadsheets on Google docs which track various aspects of the market and readers are welcome to vies and comment on them.

Google Docs Spreadsheets

There are several spreadsheet that I maintain on Google docs to track various watchlists and trends in the market.

1. The earnings list - a group of small and micro cap, low float stocks that have exhibited recent rapid earnings growth. They are modeled along the lines of William O'Neil's CAN SLIM system, but limited to small cap, highly volatile stocks.

2. The relative strength list - a group of stocks which are near 52 week highs and have shown an increase in average daily volume. The list is limited to the top 200 stocks according to my methodology, which will be detailed on one of the pages of the spreadsheet.